Tax Information With A Mother's Touch
Published by Eva Rosenberg, MBA, EA
Volume 6, Issue 261 June 6, 2004
|
Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 6, Issue 261 June 6, 2004 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
 » From: Queens, NY Dear TaxMama: I have been selling items on Ebay for 1 month. The items are given to me by a co-worker who does not know how to use the computer. He had collected these items over many years. He has no receipts for any of these items. Many of them are over 10 years old. He has tons of stuff though. I have sold about $8000 worth already in one month. We are trying to get the income tax issue resolved. I basically get 25% of the sales after fees and shipping costs. What do I report in my taxes? Will I be better off getting a business license and "going legit"? Should I get a Tax ID? Should I just charge my friend 75% of the taxes I will incur? Can I get hit with 100% of the sales prices even though I don't own the stuff I am selling? Any help would be appreciated.. Thank You, Robert  Hi Robert, Yes, yes, yes, and yes. Actually, there's a no in there somewhere. Here's how your activities apply to you: Your account shows the sales. So, report 100% of the sales income on your Schedule C. Deduct: » e-Bay's fee & shipping costs » the 75% you give your friend - report that as purchases, on page 2 of the Schedule C, under Cost of Goods sold. you won't need to issue a 1099 to him, since you're paying him for merchandise any other direct costs of using your computer How your friend reports his share of the income is his business. He'll need to either come up with the actual costs of those items, or a good estimate. I wonder if he could use the ItsDeductible tool to backtrack the original cost? Ask Don Morris if it will work. Now, as to your question about business licenses and all. It's probably a good idea. After all, if he's got a lot of stuff, you're going to be doing this for a while. And once he runs out, well ... you're hooked. You're going to find others things to sell. You'll start going through your own house, or garage sales, or buying up odd lots of things. Forget it Robert, I can just see you becoming an eBay junkie. Now that you're making this much money, life is over as you know it. There's no turning back. How do you like my skill with silly cliches? Cool! Enjoy. Sounds like you're having fun. Oh, you know what, you would be a good candidate for the Tax Helper. In fact, you might get something out the tips in the teleconference we had recently: You can listen to it for free - it offers tax tips and organization tools for small and Internet businesses, including eBay. Best wishes, Eva Rosenberg Your TaxMama  |
 |
 |
||||||||||||||||||||||||||||||||||||||||||||||
 |
 |
| Library of Congress - ISSN 1532-0790 Copyright © 2000-2007 - Eva Rosenberg |
|
Home | This Week's Issue | Articles by TaxMama | For Tax Pros Investment Secrets | IRS News | Smart Tax Moves | Critical Dates Using Money Wisely | Money Funnies & Inspiration | Because We Care About TaxMama | Our Privacy Policy | Legalese and Disclaimer | Press Page |
|
|
 |
Site design by Serenata Design. |
